Rebuilding A Bad Credit Rating

The vast majority of people have had a bad credit rating at one point in their lives, and many people still do. Loans, credit cards, and overdrafts can be crucial to help pay for things like security deposits and food shopping at certain times, especially when things are unstable. However, if you have reached a place where things are a little more settled and want to start on the road to rebuild a bad credit rating then read on for some helpful tips based on my own experience in rebuilding my credit score.

Firstly, most of the below advice is taken from the point at which I started to emerge from the worst of my debts. So before I chat about how I started to rebuild my credit rating, if you find yourself in a place where you are still struggling with debt then please read this information provided by Citizens Advice or contact one of the free debt advice agencies: National Debtline, StepChange, or PayPlan.

As an initial step, you’ll need to gain visibility of where your credit rating stands. There are a number of different credit agencies out there and each will have a slightly different score for you. Each of the big three; Equifax, Experian, and CallCredit, has it’s own paid portal to view the information they hold about you and the score that they give you. However, there are some other options, such as third party companies that give you free access to these scores such as ClearScore for your Experian report. Similarly, there are some that let you see all three credit agency scores in the same place such as checkmyfile.

Once you know your credit scores, there are a number of easy and free things you can do right away to improve your ranking. Making sure you are on the Electoral Roll, if that is something you are able to do, is a surefire way to bring up the rating. If you are not eligible to vote in the UK, sending proof of residency to the big three credit reference agencies should help you with your score. Similarly, checking they hold the correct current address for you and no old addresses (or flatmates!) are still linked to you will clear off any black marks for old, incorrect information.

If you’re happy with the information that the credit reference agencies hold about you, it’s time to start activities that will improve your score. It may seem counterintuitive, but opening small credit accounts that you can pay back relatively quickly is the perfect proof of your ‘responsibility’ to credit reference agencies. There are plenty of credit cards for bad credit and loans bad credit that will help you take those all important steps, just be sure to compare them and make an informed decision.

Another action I noticed that had a profound effect on my rating was reducing my amount of cleared debt, like bringing the limit of an overdraft or credit card down, and closing credit accounts once they were paid off. Again, this is more evidence of being responsible with your borrowing, a cleared and closed account is a good account!

These are by no means hard and fast rules as everyones credit score is different, but the steps outlined here are what have been working for me and are a great place to get started. I absolutely understand how overwhelming this sort of thing can feel, especially at the very beginning, and as I mentioned at the start of this article; if you need help with the amount of debt you have and want to talk it through with someone then please do visit the above links for impartial and specialist advice.